Fannie Mae Provides $454M Refi for Seven Multifamily Assets in the West
The deal’s structure allows the sponsors to release or substitute individual assets as well as provides annual opportunities to borrow additional proceeds commensurate with improved property performance.
GSE financing has remained an invaluable resource for the multifamily asset class, supporting not only new originations but also, as this particular deal shows, refinancing as well.
Newmark Knight Frank has closed a pair of structured transactions totaling $454 million for the refinance of seven assets on behalf of a private San Francisco-based owner and Fannie Mae priority sponsor.
NKF’s Vice Chairman Mitch Clarfield and Managing Director Ryan Greer led the GSE effort. The deal’s structure allows the sponsors to release or substitute individual assets as well as provides annual opportunities to borrow additional proceeds commensurate with improved property performance.
The first transaction was a $69.3 million, 10-year, full-term interest-only advance to fund the addition of Callaway Apartments, located in Taylorsville, Utah, to a four-year-old Fannie Mae Credit Facility. The facility now consists of five assets with 1,700 units and a balance of $240 million. Callaway is a 624-unit multifamily property with a strong mix of one- and two-bedroom floor plans. The sponsors used the proceeds to buy out a joint venture partner from a 2007 acquisition. 48% of the units met Fannie Mae’s affordable mission guidelines. The 73% loan-to-value advance priced in the 2.8% range.
In a second transaction, the NKF team funded a new $384.75 million Fannie Mae Credit Facility for the refinance of a six-property portfolio. The Fannie Mae execution was the winning bid in a process involving several lenders.
The new facility had a $130 million 10-year full term interest-only tranche and a $254.75 million 15-year tranche with 14 years of interest only at a 74% loan-to-value. The 10-year tranche had a coupon of less than 2.5% and the 15-year tranche was below 2.9%.
The six-property, 1,633-unit cross-collateralized portfolio includes four assets in Southern California, one in Northern California and one in Oregon.
- Palisades at Sierra Del Oro is located in Corona, CA and includes 288 units, built in 2015.
- Sierra Del Oro is located in Corona, CA and is comprised of 300 units, built in 1989.
- Terra Nova, situated in Chula Vista, CA and includes 233 units, built in 1985.
- Village Oaks in Chino Hills, CA totals 280 units, built in 1989.
- Hawthorn Village is located in Napa, CA and includes 244 units, built in 2003.
- Terrene at the Grove is located in Wilsonville, OR and includes 288 units, built in 2013.